Global gold supply is projected to rise by 1% in 2025, driven by higher mine production and steady recycling activity, according to the latest annual report by precious metals consultancy Metals Focus. The firm’s newly released Gold Focus 2025 report offers an in-depth examination of trends across gold supply, demand, pricing, and investment behavior, presenting both historical data from 2016 to 2024 and forecasts for the current year.

Metals Focus estimates that total gold mine production will reach 3,694 tonnes this year, setting a new annual record and surpassing 2024’s figure of 3,661 tonnes. The anticipated 1% growth is attributed to new mining projects coming online, with notable production gains expected in countries such as Mexico, Canada, and Ghana. The 2024 figure marked a 0.6% increase over the previous year and had already established a record at the time.

Recycling, which provided an additional 1,368 tonnes to the global gold supply in 2024—an increase of 11% and the highest level in 12 years—is expected to remain flat in 2025. China led global growth in recycling last year with a 26% increase. Most other regions also saw double-digit growth, largely fueled by rising gold prices. However, constraints such as low near-market stock levels, strong safe-haven sentiment, and ongoing bullish price expectations are expected to persist and limit further growth in 2025.

India diverged from the global trend in 2024, registering a decline in scrap gold recycling due to a rise in gold-backed loans, which reduced the incentive to liquidate holdings.

Demand Outlook: 9% Drop Expected Amid Weak Jewellery Sector

Despite the uptick in supply, total global gold demand is forecast to fall by 9% this year. A significant portion of this decline is attributed to jewellery fabrication, which is projected to contract by 16% in 2025. The decline comes after a 9% fall in 2024, with China driving much of the weakness. When excluding China, global jewellery demand fell just 1% last year, highlighting relative stability in other regions.

Price sensitivity has been a central factor in the decline, particularly in markets like India, where higher gold prices have curtailed consumption. The global average gold price rose by 23% in 2024 and is forecast to climb an additional 35% in 2025, reaching a projected average of $3,210 per ounce—an all-time high that would exceed the inflation-adjusted peak of 1980.

The net draw on bullion by the jewellery sector dropped by 34% in 2024, largely due to increased recycling that met part of the demand.

Central Banks Continue Buying Spree

Central bank demand for gold remained robust in 2024 and is expected to continue at elevated levels. Last year, net official sector purchases reached a record 1,086 tonnes, driven in part by ongoing efforts toward “de-dollarisation” and a desire to diversify reserves away from U.S. dollar assets. Gross sales by central banks declined significantly in 2024, partly due to the absence of large-scale disposals such as Türkiye’s in 2023.

Metals Focus projects net central bank gold purchases will total approximately 1,000 tonnes in 2025, underscoring a sustained trend toward gold accumulation amid global macroeconomic and geopolitical uncertainty.

Investment Trends: Diverging Regional Patterns

Institutional investment in gold remained strong in 2024 and is expected to remain a key driver in 2025. Factors such as interest rate expectations, fiscal concerns in the U.S., geopolitical instability, and strong equity markets contributed to gold’s appeal as a diversification tool.

Retail investment showed mixed results in 2024. While demand from Asia remained resilient, Western markets saw notable declines due to higher gold prices discouraging consumer participation. Metals Focus notes a regional divergence in bar and coin investment patterns, with Asian markets showing continued interest even as Western investors pulled back.

Industrial Use: Electronics Demand Expands, Other Segments Mixed

Industrial demand for gold presented a mixed picture. Electronics fabrication, which represents the bulk of gold’s industrial use, rose by 9% in 2024. The increase was attributed to a rebound in shipments of electronic goods, broader manufacturing recovery, and rising demand related to artificial intelligence technologies.

Looking ahead to 2025, Metals Focus projects a further 3% rise in electronics-related gold demand, despite potential headwinds from trade tariffs.

Other segments showed contraction. Decorative and miscellaneous industrial uses declined by 1% in 2024, driven by reduced demand in major markets like India and Italy. Dental demand continued its long-term decline, falling by 5% in line with structural changes in the industry.

Costs and Inflationary Pressures

The report also highlights cost pressures facing the gold mining sector. Global all-in sustaining costs (AISC) rose by 8% in 2024 to $1,399 per ounce. The increase was attributed to inflation, higher input costs, and elevated royalty payments tied to rising gold prices. These cost dynamics are likely to persist in 2025, although high gold prices may offset margin pressure for producers.

Outlook for 2025: Higher Prices Amid Global Risks

Metals Focus forecasts that gold prices will continue to rise throughout 2025, with the average price expected to hit $3,210 per ounce. The consultancy cites several risk factors likely to support the upward momentum, including potential shifts in U.S. trade and monetary policy, heightened fears of a trade war, ongoing geopolitical instability, and rising U.S. debt levels.

Despite the possibility of short-term volatility or price corrections, the broader outlook remains bullish, according to the report.

Metals Focus Managing Director Philip Newman emphasized the strategic role of gold in central bank portfolios as a hedge against systemic and geopolitical risk. He also noted the enduring strength of retail demand in Asia and the growing divergence in investment behavior between East and West.

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.

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